North Texas Municipal Water District changes budgeting method, cuts proposed water rate increase in half for FY 2018-19

The North Texas Municipal Water District board of directors approved a new budget methodology that would save member cities 14 cents on wholesale water rates.

The North Texas Municipal Water District board of directors approved a new budget methodology that would save member cities 14 cents on wholesale water rates.

Image description
NTMWD budget
Editor's note: A previous version of this article named Bois d'Arc Lake Lower Bois d'Arc Lake. The article has also been updated to clarify the 10-year rate forecast and the 90 percent of total member cities highest annual use that will be used in the fiscal year 2018-19 NTMWD budget. 

Since 2001 the North Texas Municipal Water District has increased its water rates every year. According to previous rate projections by the district, fiscal year 2018-19 rates were expected to increase by 28 cents per 1,000 gallons for member cities, including the cities of McKinney, Frisco, Plano and Richardson, but instead the rate will only increase 14 cents after a recent board vote.

This change comes after the NTMWD board of directors approved a change to the district’s budgeting method for FY 2018-19 during an Aug. 17 meeting. Member cities will pay $2.92 per 1,000 gallons during FY 2018-19 as compared to the proposed $3.06 rate. The 13 member cities currently pay $2.78 per 1,000 gallons.

“As the cities are setting their retail rates each year [for residents] a lot of the cities have been passing the increase from the district onto the [residents],” NTMWD Director of Finance Rodney Rhoades told Community Impact Newspaper. “So, the retail customer will see less of an increase [this year], in theory.”

Cities will decide individually whether cost savings will be passed onto residents. This will be included in the city’s fiscal year budgets.

The NTMWD's budget method change accounts for recent trends in water use and refined execution of the district’s capital improvement projects, such as the Bois d’Arc Lake, the official name given to the reservoir in Fannin County that will be the first to be constructed in the state in the past 30 years, said Janet Rummel, public relations and communications officer for the NTMWD.

“We’ve had a decade in swings in weather conditions, whether that be drought and watering restrictions or really wet weather also contributes to people using less water,” she said. “We have to plan our operations—a portion of the budget—based on what we believe we are going to need to expend to treat that certain amount of water [projected].”

Traditionally the operations portion of the budget was planned using 100 percent of the cities' historical highest annual use, Rummel said. With the new budget change the NTMWD will allocate 90 percent of the member cities total historical highest annual use, or minimum cost, in the operations portion of the budget.

Since FY 2006-07 member cities collectively have used 71-93 percent of the highest historical usage in the past, according to data from the NTMWD.

“We feel like we can, moving forward with this next year and potentially in future years, be able to budget less than those total minimum amounts,” Rummel said.

During FY 2017-18 six member cities—including McKinney and Frisco—went over their contractual minimums rate, which means the city’s minimums will be reset this year.

Budget changes will be reviewed each year based on historical trends, Rhoades said. The water district is looking to create a 10-year rate forecast for member cities with a 1 percent escalation factor on the variable costs for the first five years and a steady 95 percent for the remaining five years.

The budget change does not affect the lawsuit before the Public Utility Commission of Texas as the case is related to water rates and supply contracts between the NTMWD and member cities of Plano, Garland, Mesquite and Richardson, Rummel said in an email.

“The change in the budget method is related only to how the [NTMWD] calculates the total annual budget based on projected costs for operations and the capital program,” Rummel said in an email. “The case before the PUC is related to the system cost allocation among the cities we serve, which is tied to the water supply contracts. These are two separate issues.”

Water district member cities include the cities of McKinney, Frisco, Plano, Richardson, Allen, Farmersville, Forney, Princeton, Rockwall, Wylie, Royse City, Garland and Mesquite.


MOST RECENT

student writing on paper
Texas Legislature allows parents to opt for students to repeat grade levels or courses

Senate Bill 1697 is effective for the 2021-22 school year.

Candida auris causes invasive infections and can be transmitted in health care settings, a news release from Collin County Health Care Services said. (Courtesy Adobe Stock)
Collin County health officials say yeast infection that killed 4 not public threat 

The county gave no indication that generally healthy individuals should fear infection.

Oni Ramen plans to open a location in Richardson's CityLine development later this year. (Courtesy Adobe Stock)
Oni Ramen coming to Richardson; American-Italian restaurant Sfereco set to open in Lewisville and more DFW-area news

Read the latest business and community news from the Dallas-Fort Worth area, including a new bakery coming to McKinney.

Building.
Plano ISD trustees to consider new district health, safety protocols at Aug. 3 meeting

The draft protocols note face masks are optional for all students, staff and visitors, but states “universal indoor masking is recommended" for everyone, regardless of vaccination status.

Mad for Chicken opened July 23 at 216 W. Virginia St., Ste. 102, in downtown McKinney. (Courtesy Mad for Chicken)
Mad for Chicken opens; work on container homes community begins and more top news from DFW

Read the most popular business and community news from the past week from the Dallas-Fort Worth area.

Food.
Oni Ramen coming soon to CityLine development in Richardson

The restaurant's menu will include a variety of classic and signature ramen options as well as a full bar and handcrafted cocktails.

See how COVID-19 impacted Dallas County over the last week. (Community Impact staff)
Tracking COVID-19: Dallas County reports 750 new cases of coronavirus on July 29

More than 52% of Dallas County residents age 12 and older have been fully vaccinated against COVID-19 as of July 29, according to the Texas Department of State Health Services. In Collin County, that number sits at more than 62%.

School supplies will be exempt from the 8.25% sales tax Aug. 6-8. (Courtesy Adobe Stock)
What to know before the statewide tax-free weekend Aug. 6-8

Customers will not have to pay the standard 8.25% sales tax on select clothing, footwear, school supplies and backpacks under $100.

Dutch Bros Coffee opened a new drive-thru location July 26 in Plano. (Courtesy Dutch Bros Coffee)
Dutch Bros Coffee comes to Plano; meat market, butcher shop opens in Richardson and more DFW-area news

Read the latest business and community news from the Dallas-Fort Worth area, including a meat market and butcher shop that offers authentic Middle Eastern-style grilled meats that are halal and locally sourced.

The meat market and butcher shop offers authentic Middle Eastern-style grilled meats. (Courtesy Green Valley Meat Market & Grill)
Green Valley Meat Market & Grill now offering locally sourced halal food in Richardson

The meat market and butcher shop offers authentic Middle Eastern-style grilled meats.

School supplies.
Richardson ISD to host back-to-school events for district families in need

“As we head back to school for in-person learning, these events will connect many of our families with valuable resources in addition to supplies to begin the school year,” RISD Superintendent Jeannie Stone said.

Collin County Health Care Services announced on July 27 the creation of mobile vaccination teams. (Lauren Canterberry/Community Impact Newspaper)
Collin County residents can now request mobile COVID-19 vaccine services

The teams will focus on reaching homebound individuals, long-term care facilities, businesses requesting vaccination for employees and other organizations.